Apparently the 2012s will now have a tankless hot water system ( that or my rig is just an experiment).

First of all, let me say that I like it. We have 3 kids so far and the likelihood of frequent cold showers is quite high with a 6 gallon hot water tank.

So, how it works:
The heating unit is in the rear passenger side between where the washer goes and the exterior wall, just below the level of the washer. It puts a fixed amount of heat into the water as it passes through the heater. The faster the water flows, the less heat that goes into the water and the lower the corresponding temperature change.
In other words, to INCREASE the temp, you DECREASE the flow and vice-versa to decrease the temp. You basically do not use the cold water in the shower at all. In fact, it is quite difficult to use the single lever valve to select only hot water, so I turned off the cold water to the shower at the manifold in the wet bay.
This resulted in quite hot water at lower flows this weekend in Buena Vista, CO with well water temp of probably about 50 degrees. If your water supply is warmer, then you could probably mix in some cold water and achieve higher flows and still be warm enough.
Keep in mind: if you increase the water flow through the heater by turning on the hot water somewhere else (kitchen or bath sink, washer), your wife will scream as the water temp drops precipitously in the shower.

So, all in all, I prefer this system over a tank system, it just requires a little more understanding of how it works and in exchange, you can have as much hot water as you want -- until your propane tank runs out.

We are in Orlando this week where the water temp is quite a bit higher coming out of the ground. The water will get hotter than I can stand it - I had to set the switch to the 'low' setting as well as enable the cold water to the shower at the wet bay manifold.

i have a niece that has one of those in her home. (installed around mid 80's...trouble free). when two of them use hot water, the burner really cranks up. they like theirs.
i guess i have a 10 gal in my trailer. we haven't run out of hot water yet but there are only two of us. i can relate to showering and having another faucet turned on though. the only time the propane has been on on mine was right after i bought it and the elec element had been turned on with no water in it.